Mining giant BHP Billiton will have to wait until November to see if it can move ahead with its plans for a hostile takeover of rival Rio Tinto.
European Union regulators put the brakes on the proposed acquisition after an initial investigation raised concerns of higher prices and the possibility the $170-billion deal would give BHP too much influence over iron-ore prices.
A merger of the two mining companies would see them ahead of Brazil’s Companhia Vale do Rio Doce, the world’s largest iron ore miner.
Earlier this month, U.S. antitrust regulators partially approved the bid when the U.S. Department of Justice (DOJ) and the U.S. Federal Trade Commission (FTC) ended a statutory antitrust waiting period early, saying preconditions for the proposed deal had been met.
BHP is offering 3.4 shares for each of Rio Tinto’s, a deal the company rejected in February.
The 27-nation European Commission investigating the takeover bid has until Nov. 11 to make a final decision. Headquartered in Brussels, the group is the lead regulator in the deal and can approve it or force changes, including the sale of assets.
Asian and European steelmakers oppose the takeover, saying it would give BHP too much influence over iron-ore prices. Regulatory approval must also be given by Australian and South African regulators. Rio Tinto owns 60 per cent of the Diavik mine in the Northwest Territories.
